Stock Market Analysis and Personal Finance
Mr. Bernstein
Sources of Consumer Credit, pp 154-161
March 12, 2013
2
Stock Market Analysis & Personal Finance Mr. Bernstein
Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies
3
Stock Market Analysis & Personal Finance Mr. Bernstein
Sources of Consumer CreditCommercial Banks
Personal LoansAuto Loans or other Collaterialized LoansCredit Cards
Consumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies
4
Stock Market Analysis & Personal Finance Mr. Bernstein
Sources of Consumer CreditCommercial BanksConsumer Finance Companies
Little Credit History NeededWill Loan up to 100% of purchase valueQuick ApprovalOften Expensive
Credit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies
5
Stock Market Analysis & Personal Finance Mr. Bernstein
Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit Unions
Members OnlyPayroll Deduction Plans possibleNon-profit
Savings and Loans (“Thrifts”)Life Insurance Companies
6
Stock Market Analysis & Personal Finance Mr. Bernstein
Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Home ImprovementSecond Mortgage Loans (Home Equity Loans)At one time were considered local Real Estate expertsLife Insurance Companies
7
Stock Market Analysis & Personal Finance Mr. Bernstein
Sources of Consumer CreditCommercial BanksConsumer Finance CompaniesCredit UnionsSavings and Loans (“Thrifts”)Life Insurance Companies
Borrow against cash value of policyBalance outstanding deducted from death
benefits
8
Stock Market Analysis & Personal Finance Mr. Bernstein
Credit Cards“Collateralized Credit Card” builds credit ratingWatch the “gotchas”:
Grace period for late payment without finance feeAnnual fee can be $50-$500Transaction feesKnow how payments can be made without delaysHigh interest rates are common…so…
Plan to pay your credit card balance every month
9
Stock Market Analysis & Personal Finance Mr. Bernstein
Types of Personal Banking Financial ServicesChecking AccountsSavings AccountsCDsDebit CardsCredit CardsDirect DepositOverdraft ProtectionBill PayingATMs
10
Stock Market Analysis & Personal Finance Mr. Bernstein
Other Financial Services offered by Banks*Personal and Auto LoansHome Mortgages and Home Equity Loans*Investment and Retirement Products*Home, Life and Auto Insurance*
*These products and services are typically offered by another division of the bank or even an outside partner. Your local
branch office is essentially acting as a sales conduit, making a helpful introduction to another entity.
11
Stock Market Analysis & Personal Finance Mr. Bernstein
Why do banksoffer otherServices?
12
Stock Market Analysis & Personal Finance Mr. Bernstein
CD rates,1965-present
13
Stock Market Analysis & Personal Finance Mr. Bernstein
CD rates,1965-present
14
Stock Market Analysis & Personal Finance Mr. Bernstein
Fed FundsRate1952-present
15
Stock Market Analysis & Personal Finance Mr. Bernstein
Interest Rates for SaversWhy are rates currently so low?Is it reasonable to assume rates likely to remain low throughout your lifetime?What is the relationship between inflation and interest rates?